GST on Professional Services: Rates, Applicability and Calculation

GST on Professional Services: Rates, Applicability and Calculation. Goods and Services Tax (GST) is a unified tax system in India that applies to the supply of goods and services, including various professional services. Professionals such as Chartered Accountants, Company Secretaries, Lawyers, Architects, Doctors, Engineers, Consultants, and Freelancers are required to comply with GST regulations if their annual turnover exceeds the prescribed threshold limit Rs.20 lakh in most states and Rs.10 lakh in special category states. Most professional services fall under the standard GST rate of 18%. To remain compliant, professionals must register under GST, issue tax invoices, collect applicable GST, and file returns on time. This article explains the GST rates, applicability, exemptions, and calculation methods for professional services, helping professionals stay informed and compliant.
Learn more about GST Rates for Different Goods and Services in India.
Applicability of GST on Professional Services
Under the Goods and Services Tax (GST) regime, professional services are considered taxable unless specifically exempted. GST applies to individuals or firms offering services based on their expertise or qualifications, such as Chartered Accountants, Lawyers, Doctors, Architects, Engineers, Consultants, Freelancers, and similar professionals.
According to Section 22 of the CGST Act, 2017, GST is applicable when the aggregate turnover of a professional exceeds:

Rs.20 lakh per financial year in most Indian states, or

Rs.10 lakh in special category states (like Manipur, Mizoram, Tripura, and Nagaland).

Professionals exceeding these thresholds must register under GST and charge tax on their services. However, even those below the threshold may opt for voluntary registration to avail Input Tax Credit (ITC) and issue GST-compliant invoices.
Some professional services, such as healthcare and education, are exempt from GST under specific conditions. In all other cases, professional services attract 18% GST under the standard rate.
GST Rates Applicable on Professional Services
Under the GST regime, most professional services are classified under the Standard Tax Rate Slab and attract a GST rate of 18%. This includes services offered by professionals such as Chartered Accountants, Company Secretaries, Lawyers, Architects, Engineers, Consultants, IT professionals, and Freelancers.
These services are generally classified under the Service Accounting Code (SAC) 9983 or 9982, depending on the specific profession.
Common Professional Services and Their GST Rates:

Accounting, Auditing, Legal, and Consultancy Services – SAC 9982 – 18% GST

IT and Software Consulting Services – SAC 9983 – 18% GST

Architectural and Engineering Services – SAC 9983 – 18% GST

Management or Business Consultants – SAC 9983 – 18% GST

Exemptions:
Certain services, such as healthcare provided by registered medical professionals and educational services, are exempt under Notification No. 12/2017 – Central Tax (Rate).
Professionals must check the correct SAC code and GST rate applicable to their specific service category to ensure compliance.
GST Registration for Professional Services
Under the GST law, any professional providing taxable services must obtain GST registration if their aggregate turnover exceeds the prescribed threshold limits. This includes professionals such as Chartered Accountants, Company Secretaries, Lawyers, Architects, Engineers, IT consultants, Freelancers, and others offering specialized services for a fee.
Threshold Limits for GST Registration:

Rs.20 lakh per financial year for most states in India

Rs.10 lakh for special category states (like Mizoram, Manipur, Tripura, Nagaland, etc.)

Once a professional’s turnover crosses these limits, GST registration becomes mandatory. However, professionals can also voluntarily register under GST, even if they fall below the threshold, to:

Issue GST-compliant invoices

Claim Input Tax Credit (ITC) on business expenses

Enhance credibility among clients, especially corporates

Registration is done through the GST portal (www.gst.gov.in), and once registered, professionals must comply with invoicing, tax collection, and return filing obligations as per the GST law.
Documents Required for GST Registration
Professionals seeking GST registration in India need to submit a set of documents that verify their identity, business address, and banking details. The documentation requirements vary slightly depending on the type of business structure (proprietorship, partnership, or company), but the following are commonly required for most professionals:
Identity and Address Proof

PAN Card of the applicant (mandatory for all types of registrations)

Aadhaar Card of the proprietor/partner/director

Passport-size photograph of the applicant

Business Address Proof

Ownership proof (Electricity bill, Property tax receipt, etc.) if premises are owned

Rent/Lease Agreement (if the premises are rented)

NOC (No Objection Certificate) from the owner, if using a third-party property

Proof of Business

Professional qualification certificate (for CAs, Lawyers, Doctors, etc.)

Letter of authorization or Board Resolution (for partnerships/companies)

Partnership deed or Certificate of Incorporation (for firms or companies)

Bank Details

Cancelled cheque or

Bank statement/passbook copy showing the name, IFSC code, and account number

Digital Signature Certificate (DSC)

Required for companies and LLPs for verification and signing forms digitally

Professionals can apply online through the GST portal (www.gst.gov.in). Once documents are submitted and verified, a GSTIN (Goods and Services Tax Identification Number) is issued, and the professional is legally registered to collect and remit GST.
Calculation of GST on Professional Services
Calculating GST on professional services is straightforward once you know the applicable GST rate and the value of the service provided. In most cases, professional services attract 18% GST, which includes 9% CGST (Central GST) and 9% SGST (State GST) if the supplier and recipient are in the same state, or 18% IGST (Integrated GST) if they are in different states.
Formula for GST Calculation:
GST Amount = (Professional Fee × GST Rate) / 100
 Total Invoice Value = Professional Fee + GST Amount
Example:
Let’s assume a Chartered Accountant charges Rs.50,000 for an audit assignment in the same state.

Professional Fee: Rs.50,000

GST Rate: 18%

GST Amount: Rs.50,000 × 18% = Rs.9,000
   - CGST @ 9% = Rs.4,500
   - SGST @ 9% = Rs.4,500

Total Invoice Value = Rs.50,000 + Rs.9,000 = Rs.59,000

If the client is in a different state, IGST of Rs.9,000 would apply instead.
Professionals must issue a GST-compliant invoice with proper breakdown of CGST, SGST, or IGST, and maintain records for return filing.
To Conclude
GST has significantly impacted the way professional services are taxed in India, ensuring uniformity and transparency across the country. Professionals such as consultants, lawyers, architects, freelancers, and others must understand the applicability of GST, the 18% standard rate, and the process of registration and tax calculation. Once the prescribed turnover threshold is crossed, registration under GST becomes mandatory, and professionals must issue proper tax invoices and file regular returns. Correct GST calculation and timely compliance not only help avoid penalties but also enhance credibility and enable Input Tax Credit benefits. In today’s regulatory environment, staying informed and compliant with GST provisions is essential for smooth operations in any professional service domain.
FAQs
Q1. What is the GST rate applicable on professional services?
Ans. Most professional services are taxed at 18% GST, which includes 9% CGST and 9% SGST (for intra-state supply) or 18% IGST (for inter-state supply).
Q2. Who needs to register for GST in professional services?
Ans. Any professional whose annual turnover exceeds Rs.20 lakh (or Rs.10 lakh in special category states) is required to register under GST. Voluntary registration is also allowed.
Q3. Are all professional services taxable under GST?
Ans. No. Some services such as healthcare by registered medical practitioners and education by qualified teachers may be exempt under GST notifications.
Q4. How is GST calculated on professional services?
Ans. GST is calculated on the professional fee using the formula:
 GST Amount = (Fee × GST Rate) / 100.
 Add this to the base fee to get the total invoice value.
Q5. Can professionals claim Input Tax Credit (ITC)?
Ans. Yes, professionals registered under GST can claim ITC on goods and services used for business purposes, provided they are not exclusively offering exempt services.
Q6. Do freelancers and consultants have to pay GST?
Ans. Yes, if a freelancer or consultant’s turnover exceeds the threshold, or if they serve clients in other states or countries, GST registration and GST compliance become necessary.
Q7. What happens if GST returns are not filed on time?
Ans. Late filing attracts a late fee and 18% interest per annum on the unpaid tax. Continuous default can lead to penalties and cancellation of registration.
Q8. Is GST applicable on export of professional services?
Ans. No, export of services is treated as a zero-rated supply under GST, provided payment is received in foreign currency and both the service provider and recipient are located in different countries.
Q9. Do professionals need to file GST returns monthly or quarterly?
Ans. Professionals with turnover up to Rs.5 crore can opt for the QRMP scheme and file returns quarterly, while paying tax monthly. Others must file monthly GSTR-1 and GSTR-3B.
Q10. Can a professional with income below Rs.20 lakh still register for GST?
Ans. Yes, voluntary registration is allowed. This helps claim Input Tax Credit (ITC), issue GST invoices, and work with clients who prefer GST-compliant vendors.

Goods and Services Tax (GST) is a unified tax system in India that applies to the supply of goods and services, including various professional services. Professionals such as Chartered Accountants, Company Secretaries, Lawyers, Architects, Doctors, Engineers, Consultants, and Freelancers are required to comply with GST regulations if their annual turnover exceeds the prescribed threshold limit Rs.20 lakh in most states and Rs.10 lakh in special category states. Most professional services fall under the standard GST rate of 18%. To remain compliant, professionals must register under GST, issue tax invoices, collect applicable GST, and file returns on time. This article explains the GST rates, applicability, exemptions, and calculation methods for professional services, helping professionals stay informed and compliant.

Learn more about GST Rates for Different Goods and Services in India.

Applicability of GST on Professional Services

Under the Goods and Services Tax (GST) regime, professional services are considered taxable unless specifically exempted. GST applies to individuals or firms offering services based on their expertise or qualifications, such as Chartered Accountants, Lawyers, Doctors, Architects, Engineers, Consultants, Freelancers, and similar professionals.

According to Section 22 of the CGST Act, 2017, GST is applicable when the aggregate turnover of a professional exceeds:

Rs.20 lakh per financial year in most Indian states, or
Rs.10 lakh in special category states (like Manipur, Mizoram, Tripura, and Nagaland).

Some professional services, such as healthcare and education, are exempt from GST under specific conditions. In all other cases, professional services attract 18% GST under the standard rate.

GST Rates Applicable on Professional Services

Under the GST regime, most professional services are classified under the Standard Tax Rate Slab and attract a GST rate of 18%. This includes services offered by professionals such as Chartered Accountants, Company Secretaries, Lawyers, Architects, Engineers, Consultants, IT professionals, and Freelancers.

These services are generally classified under the Service Accounting Code (SAC) 9983 or 9982, depending on the specific profession.

Common Professional Services and Their GST Rates:

Accounting, Auditing, Legal, and Consultancy Services – SAC 9982 – 18% GST
IT and Software Consulting Services – SAC 9983 – 18% GST
Architectural and Engineering Services – SAC 9983 – 18% GST
Management or Business Consultants – SAC 9983 – 18% GST

Exemptions:

Certain services, such as healthcare provided by registered medical professionals and educational services, are exempt under Notification No. 12/2017 – Central Tax (Rate).

Professionals must check the correct SAC code and GST rate applicable to their specific service category to ensure compliance.

GST Registration for Professional Services

Under the GST law, any professional providing taxable services must obtain GST registration if their aggregate turnover exceeds the prescribed threshold limits. This includes professionals such as Chartered Accountants, Company Secretaries, Lawyers, Architects, Engineers, IT consultants, Freelancers, and others offering specialized services for a fee.

Threshold Limits for GST Registration:

Rs.20 lakh per financial year for most states in India
Rs.10 lakh for special category states (like Mizoram, Manipur, Tripura, Nagaland, etc.)

Once a professional’s turnover crosses these limits, GST registration becomes mandatory. However, professionals can also voluntarily register under GST, even if they fall below the threshold, to:

Issue GST-compliant invoices
Claim Input Tax Credit (ITC) on business expenses
Enhance credibility among clients, especially corporates

Registration is done through the GST portal (www.gst.gov.in), and once registered, professionals must comply with invoicing, tax collection, and return filing obligations as per the GST law.

Documents Required for GST Registration

Professionals seeking GST registration in India need to submit a set of documents that verify their identity, business address, and banking details. The documentation requirements vary slightly depending on the type of business structure (proprietorship, partnership, or company), but the following are commonly required for most professionals:

Identity and Address Proof

PAN Card of the applicant (mandatory for all types of registrations)
Aadhaar Card of the proprietor/partner/director
Passport-size photograph of the applicant

Business Address Proof

Ownership proof (Electricity bill, Property tax receipt, etc.) if premises are owned
Rent/Lease Agreement (if the premises are rented)
NOC (No Objection Certificate) from the owner, if using a third-party property

Proof of Business

Professional qualification certificate (for CAs, Lawyers, Doctors, etc.)
Letter of authorization or Board Resolution (for partnerships/companies)
Partnership deed or Certificate of Incorporation (for firms or companies)

Bank Details

Cancelled cheque or
Bank statement/passbook copy showing the name, IFSC code, and account number

Digital Signature Certificate (DSC)

Required for companies and LLPs for verification and signing forms digitally

Calculation of GST on Professional Services

Calculating GST on professional services is straightforward once you know the applicable GST rate and the value of the service provided. In most cases, professional services attract 18% GST, which includes 9% CGST (Central GST) and 9% SGST (State GST) if the supplier and recipient are in the same state, or 18% IGST (Integrated GST) if they are in different states.

Formula for GST Calculation:

GST Amount = (Professional Fee × GST Rate) / 100

Total Invoice Value = Professional Fee + GST Amount

Example:

Let’s assume a Chartered Accountant charges Rs.50,000 for an audit assignment in the same state.

Professional Fee: Rs.50,000
GST Rate: 18%
GST Amount: Rs.50,000 × 18% = Rs.9,000

- CGST @ 9% = Rs.4,500

- SGST @ 9% = Rs.4,500
Total Invoice Value = Rs.50,000 + Rs.9,000 = Rs.59,000

If the client is in a different state, IGST of Rs.9,000 would apply instead.

Professionals must issue a GST-compliant invoice with proper breakdown of CGST, SGST, or IGST, and maintain records for return filing.

To Conclude

GST has significantly impacted the way professional services are taxed in India, ensuring uniformity and transparency across the country. Professionals such as consultants, lawyers, architects, freelancers, and others must understand the applicability of GST, the 18% standard rate, and the process of registration and tax calculation. Once the prescribed turnover threshold is crossed, registration under GST becomes mandatory, and professionals must issue proper tax invoices and file regular returns. Correct GST calculation and timely compliance not only help avoid penalties but also enhance credibility and enable Input Tax Credit benefits. In today’s regulatory environment, staying informed and compliant with GST provisions is essential for smooth operations in any professional service domain.

FAQs

Q1. What is the GST rate applicable on professional services?

Ans. Most professional services are taxed at 18% GST, which includes 9% CGST and 9% SGST (for intra-state supply) or 18% IGST (for inter-state supply).

Q2. Who needs to register for GST in professional services?

Ans. Any professional whose annual turnover exceeds Rs.20 lakh (or Rs.10 lakh in special category states) is required to register under GST. Voluntary registration is also allowed.

Q3. Are all professional services taxable under GST?

Ans. No. Some services such as healthcare by registered medical practitioners and education by qualified teachers may be exempt under GST notifications.

Q4. How is GST calculated on professional services?

Ans. GST is calculated on the professional fee using the formula:

GST Amount = (Fee × GST Rate) / 100.

Add this to the base fee to get the total invoice value.

Q5. Can professionals claim Input Tax Credit (ITC)?

Ans. Yes, professionals registered under GST can claim ITC on goods and services used for business purposes, provided they are not exclusively offering exempt services.

Q6. Do freelancers and consultants have to pay GST?

Ans. Yes, if a freelancer or consultant’s turnover exceeds the threshold, or if they serve clients in other states or countries, GST registration and GST compliance become necessary.

Q7. What happens if GST returns are not filed on time?

Ans. Late filing attracts a late fee and 18% interest per annum on the unpaid tax. Continuous default can lead to penalties and cancellation of registration.

Q8. Is GST applicable on export of professional services?

Ans. No, export of services is treated as a zero-rated supply under GST, provided payment is received in foreign currency and both the service provider and recipient are located in different countries.

Q9. Do professionals need to file GST returns monthly or quarterly?

Ans. Professionals with turnover up to Rs.5 crore can opt for the QRMP scheme and file returns quarterly, while paying tax monthly. Others must file monthly GSTR-1 and GSTR-3B.

Q10. Can a professional with income below Rs.20 lakh still register for GST?

Ans. Yes, voluntary registration is allowed. This helps claim Input Tax Credit (ITC), issue GST invoices, and work with clients who prefer GST-compliant vendors.